When a CEO announces “cost cutting”, everyone knows what that means: service rollbacks, layoffs, and facility closures. It’s not just a euphemism: to reduce spending, you fire the people doing expensive stuff and sell off the places they work. “No company has ever cut their way to profitability”, as the truism goes, but there’s a codicil…
When a CEO announces “cost cutting”, everyone knows what that means: service rollbacks, layoffs, and facility closures. It’s not just a euphemism: to reduce spending, you fire the people doing expensive stuff and sell off the places they work. “No company has ever cut their way to profitability”, as the truism goes, but there’s a codicil: “to make any difference at all, cuts have to be real”.
There are always “cuts for show”: the coffee is cheaper, or they replace the free coffee with vending machines; instead of commemorative leather jackets for the quarter’s top earners, they get a “special exclusive badge” on their intranet directory listing. These ain’t nothing, but they aren’t really anything, either.
But except for grants and direct-payment programs, the federal government under Elon Musk works on the same principles. It doesn’t matter if you have funding to do 3000 surgeries for kids if you fire all the surgeons. It doesn’t matter if you have funding to forecast the weather if there aren’t enough employees to launch the weather balloons. Elon knows that. He’s counting on that. He’s using that, riding on the gross misperception Americans have that the median federal worker is lazy and overpaid. (Rigorous accounting shows quite the opposite: federal workers are willing to take a substantial pay cut for the same or greater work than they’d do in the private sector.)
When a CEO announces “cost cutting”, everyone knows what that means: service rollbacks, layoffs, and facility closures. It’s not just a euphemism: to reduce spending, you fire the people doing expensive stuff and sell off the places they work. “No company has ever cut their way to profitability”, as the truism goes, but there’s a codicil: “to make any difference at all, cuts have to be real”.
There are always “cuts for show”: the coffee is cheaper, or they replace the free coffee with vending machines; instead of commemorative leather jackets for the quarter’s top earners, they get a “special exclusive badge” on their intranet directory listing. These ain’t nothing, but they aren’t really anything, either.
But except for grants and direct-payment programs, the federal government under Elon Musk works on the same principles. It doesn’t matter if you have funding to do 3000 surgeries for kids if you fire all the surgeons. It doesn’t matter if you have funding to forecast the weather if there aren’t enough employees to launch the weather balloons. Elon knows that. He’s counting on that. He’s using that, riding on the gross misperception Americans have that the median federal worker is lazy and overpaid. (Rigorous accounting shows quite the opposite: federal workers are willing to take a substantial pay cut for the same or greater work than they’d do in the private sector.)